ACCA Taxation (F6) Practice Exam

What are the available capital gains tax reliefs for individual taxpayers?

1. Personal allowance relief and spouse exemption relief

2. Principle private residence relief and rollover relief

3. Inheritance tax relief and capital gains deferment relief

4. Only principal private residence relief is available

The correct answer is: Principle private residence relief and rollover relief

The correct answer identifies principal private residence relief and rollover relief as available capital gains tax reliefs for individual taxpayers. Principal private residence relief is designed to exempt individuals from capital gains tax on the sale of their main home. This relief ensures that any increase in the value of the primary residence is not taxed, enabling taxpayers to sell their homes without facing a capital gains tax burden on the gain made during their period of ownership. This relief applies to the periods when the residence was used as the taxpayer's only or main home. Rollover relief, on the other hand, allows taxpayers to defer paying capital gains tax when they sell a business asset, provided that the proceeds are reinvested in a new business asset. This encourages individuals to reinvest in their businesses rather than be penalized with a capital gains tax liability at the point of sale. The other options provided do not accurately list capital gains tax reliefs that apply in this context. Personal allowance relief and spouse exemption relief are not related to capital gains tax but rather pertain to income tax matters. Inheritance tax relief and capital gains deferment relief also do not fit within the specific provisions for capital gains tax relief. Singularly stating that only principal private residence relief is available fails to acknowledge the